Steller column: Hype aside, Arizona’s Prop. 127 is likely to cost us something
Don't believe the hype.
I've done my best to talk with utility representatives, the opponents and supporters of the proposition and other experts. I've gone over the studies, I've considered the politics, and I don't think passing Prop. 127 would mean economic or electric disaster for
But it probably would cost us more, I've concluded, even though advocates of the initiative are saying it would not. They say it would actually save us money and add jobs. My thought: probably not.
Before I tell you why I think that, we should all remember why we're talking about a mandate of 50 percent renewables on
While Steyer has his own personal interests -- a run for the presidency as a Democrat, maybe, and an investment in solar energy -- the most basic motivation for the initiative is to reduce the burning of fossil fuels that contributes to global warming.
We can't do much to affect this global phenomenon in
But it's natural that people think more of their own pocketbooks. And this year's studies of the potential effects of the Clean Energy Initiative started off with an apocalyptic-sounding analysis of the economic impact by the
The
In August, Seidman released a more alarming analysis. In a two-page memo, Seidman projected that
When you call Seidman to inquire about these analyses, they don't put you through to the author. They put you through to a recording, of a man with an English accent explaining that, yes, they got all their information from APS, but their model is validated and "All of our research is independent, objective and apolitical."
The nuclear question
Perhaps the most touchy and controversial input, or assumption, contained in the Seidman reports is that the
APS has a compelling argument for why this might happen. Nuclear plants have to operate at full tilt, not turned down and up like a burner on a stove. Solar energy, on the other hand is variable, flooding onto the grid in the middle of the day and disappearing quickly as evening descends.
That means that in the middle of sunny days, excess power may be produced, leaving no place for the nuclear plant to send its electrons as the utilities prioritize using solar energy to meet the Prop. 127 mandate. This would happen The plant can't ratchet up and down, so it could end up closing as new renewables become available and compete with the plant to find a market.
"Too much energy production is expected regularly in the future under Prop. 127, not just during short periods," said
He noted that
A separate report by the Residential Utility Consumer Office listed another threat to
But the supporters of Prop. 127 argue that the alleged threats are exaggerated. For one, they say, the threat of excess production is relevant only in parts of spring and fall, on days when the sun produces a lot of solar power but there isn't much use of air conditioning to soak up that power. When that does happen, as
"There are a ton of things you would do before you would consider shutting down a nuclear plant," Quinlan said.
Cheaper energy outlook
Lazar is sympathetic with the studies produced by Sullivan and the
"The cost of renewables has come down so much, that I don't really think there should be a concern about utility rates rising faster than they have," he said. "It's not going to require a great deal of storage. If there's a great deal of solar and wind, you need a little storage to get you through the day."
Indeed, that's what Sullivan and Quinlan argued to me last week and in three studies the NRDC has produced supporting the proposition: The initiative will actually save consumers money and create thousands of jobs. Their argument rests on the idea that the initiative will require the installation of a lot of cheap renewables, mostly solar plants, without requiring a lot of new battery storage, which is relatively expensive now.
TEP's projections
That did not seem realistic to two
One of the most intriguing projects would use solar power to pump water uphill in the day, store it behind a dam, then release it and produce hydro power at night. The dam then becomes a form of storing solar power. A sister company of TEP owns the land and rights for such a project in the
The actual cost of storage is, of course, unclear, but Sheehan said their model projects a 40 percent decrease in the price of four-hour lithium-ion batteries over the next five years, and the question is whether the batteries can become cheaper than a peaker plant, a gas plant used for times of peak demand, in the near future.
"If you can get eight hours out of a battery, it's a game changer," Sheehan said.
But capital costs aren't the only additional costs. TEP expects it will have to pay to convince sufficient customers to put rooftop solar on their homes, which is required to be 10 percent of the utilities' energy production by 2030 under the initiative. There could also be some costs of retiring old plants, such as the coal plant near
When you add all that up, TEP projects a
The Residential Utility Consumer Office projects a smaller increase for TEP customers, in part because it assumes only one unit of the
For APS customers, RUCO's study projects an increase resulting from Prop. 127 of
The variables in all these forecasts are crazy-making: Will Palo Verde stay open? How cheap will solar power and storage become? How many fossil-fuel plants will close or be opened?
I think it's reasonable to settle into a conclusion that the investments necessary to arrive at 50 percent renewables by 2030 will cost us ratepayers more money. But my best guess is that the likely outcome is nowhere near the
It's more likely to be closer to the range that RUCO is projecting --significant, especially to the poor, but not overwhelming for other customers and the state's economy.
Respond: Write a letter to the editor -- Write a guest opinion
Contact: [email protected] or 807-7789. On Twitter: @senyorreporter
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